Ford Performs Stronger than Expected in Second Quarter Financial Results

Ford Motor Co. in Dearborn released its second quarter financial results today, which showed a stronger than expected performance despite a semiconductor supply shortage and rolling out its plan for Ford+.
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The Ford F-150 Lightning Pro, part of the company's future plans for vehicle electrification, just part of its strong second quarter. // Courtesy of Ford
The Ford F-150 Lightning Pro, an early entry to the company’s future plans for vehicle electrification, which contributed to its strong second quarter. // Courtesy of Ford

Ford Motor Co. in Dearborn released its second quarter financial results today, which showed a stronger than expected performance despite a semiconductor supply shortage and rolling out its plan for Ford+.

“Ford+ is about creating distinctive products and services, always-on customer relationships, and user experiences that keep improving,” says Jim Farley, Ford’s president and CEO. “And it’s already happening — there are great examples everywhere you turn at Ford, and the benefits for our customers and company will really stack up over time.”

The company reported a second quarter revenue of $26.8 billion, a net income of $561 million, and adjusted earnings before interest and taxes (EBIT) of $1.1 billion. The Blue Oval Intelligence software stack saw 95 percent of Mustang Mach-E owners opt into the service that initiates software updates over-the-air.

The Mach-E ranks as the No. 2 all-electric sport utility vehicle in the United States after only seven months of shipments. The F-150 Lightning generated 120,000 reservations since it was unveiled in May, nearly 75 percent of them new to Ford.

The company also recently unveiled the Maverick, a five-passenger small pickup with an estimated range of 40 miles per gallon in the city. Last week a partnership with Argo AI and Lyft was announced, in which Ford will deploy driverless vehicles later this year in Miami.

Second-quarter cash flow from operations was $756 million. Adjusted free cash flow (FCF) for the period was negative $5.1 billion, reflecting the expected greater effect of semiconductor-related volume losses on FCF than EBIT because of adverse working capital and timing differences. Cash and liquidity remain very strong, with $25.1 billion and $41.0 billion, respectively.

“We’re on a new path, with the Ford+ plan, financial flexibility, and a resolve to make us an even stronger company,” says John Lawler, CFO of Ford. “We’re developing connected, high-quality vehicles and services that are great for customers and profitable for Ford.”

Turnarounds of company business units outside of North America remain on track. Aggregate second-quarter EBIT in those regions improved by $828 million year over year but was down from the first quarter. The sequential drop was primarily attributed to a 35 percent sequential decline in wholesales in Europe related to semiconductor availability.

The company has seen growing strength with commercial customers in Europe and major investments in electric vehicle — including $1 billion for a new manufacturing center in Cologne, Germany. Also planned is a regional launch of E-Transit commercial vans and all-electric light commercial vehicles that will be built in Romania.

Ford’s appeal with commercial customers in China continues to grow. Commercial vehicles accounted for 52 percent of overall sales mix. Later this year, Ford China will introduce a locally built version of the Mustang Mach-E.

Lawler says that Ford has raised its expectation for full year adjusted EBIT by about $3.5 billion, to between $9 billion and $10 billion. Volume is expected to increase by about 30 percent sequentially from the first to the second half of the year, driving an improvement in market factors net of production costs.

The company has lifted its target for full year adjusted free cash flow to between
$4 billion and $5 billion, supported by expected favorable second half working capital as vehicle production increases with anticipated improvement in availability of semiconductors.

Ford plans to report its third-quarter 2021 financial results on Oct. 27.

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